Show that under the CAPM assumptions all mean-variance efficient portfolios can be expressed as combinations of two distinct portfolios.

4. Show that under the CAPM assumptions all mean-variance efficient portfolios can be expressed as combinations of two distinct portfolios. What does the representative agent"s utility function look like if everyone in the economy has linear utility functions, u(ci0) = ci0, and u(ciw) = ciw. What are the state prices in such an economy? 6. Make all of the assumptions that we made in deriving the consumption-based model except for the assumption of a risk-free rate. What sort of asset pricing model do you get from this?